No. 24/262/DKom
Based on data published by BPS-Statistics Indonesia, the Consumer Price Index (CPI) in September 2022 experienced 1.17% (mtm) inflation after recording 0.21% (mtm) deflation the month earlier. Inflation primarily stemmed from higher administered prices (AP) amid lower core inflation and volatile food (VF) deflation. Consequently, CPI inflation in September 2022 increased to 5.95% (yoy) from 4.69% (yoy) in the previous period. Moving forward, headline inflationary pressures are expected to intensify due to the second-round effect of higher subsidised fuel prices, escalating inflationary pressures on the demand side as well as persistently high global energy and food prices. Such developments have pushed inflation in 2022 beyond the upper bound of the 3.0%±1% target corridor, thus requiring strong policy synergy between the central/regional government and Bank Indonesia on both the demand and supply sides to return inflation to the target range in the latter half of 2023. Furthermore, Bank Indonesia continues to strengthen policy coordination with the central government, regional governments and other strategic partners in the Central and Regional Inflation Control Teams (TPIP and TPID) by improving the effectiveness of the National Movement for Food Inflation Control (GNPIP) in various regions to maintain price stability and safeguard food security.
Core inflation in September 2022 was controlled at 0.30% (mtm), down from 0.38% (mtm) in August 2022. The monthly decrease recorded in core inflation was primarily influenced by lower gold jewellery prices in line with global prices, while the second-round effect of fuel price adjustments on core inflation was effectively mitigated in September 2022. Notwithstanding, further declines were offset by higher tuition fees in line with the ongoing economic recovery process. Annually, core inflation in September 2022 stood at 3.21% (yoy), up from 3.04% (yoy) the month earlier. Moving forward, core inflation and inflation expectations are expected to persist in response to the second-round effect of higher subsidised fuel prices, coupled with a build-up of inflationary pressures on the demand side. Bank Indonesia remains firmly committed to lowering inflation expectations and core inflation in line with the 3.0%±1% target in the second half of 2023.
Volatile food (VF) in September 2022 recorded 0.79% (mtm) deflation compared with 2.90% (mtm) deflation in the previous period. The main contributors to VF deflation in the reporting period were shallots, various chili varieties and cooking oil given increasing supply due to the harvesting season at several regional production hubs and maintained supply of cooking oil. On the other hand, rice experienced inflationary pressures in line with the second harvesting season at several regional production centres. Annually, volatile food recorded 9.02% (yoy) inflation in the reporting period, up from 8.93% (yoy) one month earlier.
Inflationary pressures on administered prices increased to 6.18% (mtm) in September 2022 from 0.33% (mtm) in the previous period. The increase stemmed from the first-round effect of higher subsidised fuel prices, as reflected by escalating inflationary pressures on petrol, intracity transit fares, diesel, interprovincial transit fares and online ride-hailing fares. Annually, administered prices recorded 13.28% (yoy) inflation, up from 6.84% (yoy) one month earlier.
Jakarta, 3rd October 2022
Head of Communication Department
Erwin Haryono
Executive Director
Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id
